Nathaniel Chastain is charged on counts of wire fraud and money laundering. Each carry a max sentence of 20 years. He only profited 19 ETH.
At today’s exchange rate that 19 Ethereum (or Ether) would be equivalent to $34,200. From news reports, during the time of Chastain’s alleged OpenSea fraud it may have been worth more like $67,000
That’s still low when compared to the scale of insider trading and market manipulation that is commonplace on Wall Street and across traditional finance – referred to as TradFi in cryptocurrency circles, in opposition to DeFi (decentralized finance).
OpenSea Fraud – Crypto Twitter Reacts
Many online crypto and NFT investors and traders have commented on the OpenSea fraud case, which made hyperbolic mainstream headlines across the internet as the ‘first-ever NFT insider trading’.
Soby (@sobylife) tweeted that non-fungible tokens aren’t securities so insider trading laws shouldn’t apply. He acknowledged what Chastain did was wrong, but disagreed with the maximum sentencing of up to forty years over just 45 NFTs and 19 ETH.
Soby, the co-founder of Ex Populus a Web3 development studio involved in building metaverse projects, went on to say people should push back on any kind of precedent being set to consider NFTs securities.
CryptoAmsterdam.eth (@damskotrades) tweeted a collage of times politicians, senators, Fed officials, judges and others in the financial elite have been involved in insider trading, amounting to six or seven figures, and escaped punishment. Nancy Pelosi’s stock portfolio has become an internet meme.
Some have compared Nate Chastain to Ross Ulbricht – with NFTs now being made an example of by the US Government and DOJ just as Bitcoin and cryptocurrencies were with Silk Road.
Whiteman.loopring.eth (whiteman_yolo) pointed out the Department of Justice are cracking down on small fries rather than going after and prosecuting Congress insiders.
Traders weren’t really on the wrong side of the insider trades Nathaniel Chastain took – he just knew that certain NFT tokens and collections would get more exposure on the OpenSea homepage, and sold them at a higher floor price than he bought them for.
That’s not really comparable to a scam, fraud or rug pull where tokens are dumped on the market, leaving them worthless. OpenSea also asked him to step down when they uncovered that activity.
However some of those that invest in NFTs may be looking for some alternative NFT marketplaces:
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